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Mayor and Members of the City Council . City of St. Anthony, Minnesota Housing and Redevelopment Projects During the past several years, redevelopment plans for projects have been amended and/or changed to permit expanded use of tax increment revenues. Many of these amendments are the result of changes initiated by the State of Minnesota. As part of these amendments the financial plans and budgets associated with redevelopment projects have been reviewed and amended accordingly to document the expanded use of these increment revenues. These amended financial plans have been approved by the City Council to reflect its approval of the anticipated use of these funds. One such example, is the `pledging' of surpluses from certain tax increment districts for debt service requirements of the bonds issued for construction of the Community Center facility. The amendment pocess will become increasingly more critical in the future as the State continues to enact legislation to further limit the use of tax increment revenues. In addition, it is anticipated that the State will be commencing a review of all tax increment projects in the next several years to determine compliance with existing laws and regulations and one of the steps will be to compare actual activity with financial plans and budgets. In accordance, the City should receive documentation from developers receiving direct assistance from the Authority to insure that the assistance was actually used for the purposes granted. An example of this would be when the Authority provides assistance to a developer for soil corrections, the Authority should receive docu- mentation supporting that the amounts were expended for their intended purposes. This documentation could be copies of invoices paid by the developer and signed statements that funds received were expended for the purposes granted. This docu- mentation needs to be made part of the redevelopment project records. Once again, it is anticipated the State will be looking for such documentation when reviewing tax increment projects. This step of documentation is best completed when the funds are disbursed rather than having to go back and recreating the conditions surrounding the financial assistance granted. Community Center As the construction of the Community Center nears completion, it is important that the City obtain documentation from the project engineer/architect as certification that construction costs associated with the city hall portion of the facility were paid from City funds to satisfy provisions of the bond indenture. According to the bond indenture, the entire construction costs of the city hall portion must be paid with City funds. Proceeds from the bonds were to be expended only for the community, educational and recreational portions of the facility. Operating costs of the Community Center should be seperated from operating costs of the former center during the transition period in 1997. This in necessary to pro- vide a separate accounting of operating costs to determine the adequacy of rents and other revenues to support operating costs of the new Community Center. As of December 31 , 1996, the City has a surplus of appoximately $23,000 from operations of the former center. Final operating costs of the former center should be applied . against this fund balance. The excess, if any, remaining after these costs may be designated by the Council . Commencing in 1997, operations of the Community Center will be presented as a separate, internal service fund in the City's financial report.